Apple (AAPL +0.54%) is one of the most fascinating businesses ever built. The company revolutionized the way people work, consume, and communicate and has done so by building some of the most sought-after electronic devices in the world. It's no surprise that Warren Buffett, who generally does not dabble in the tech sector, owns Apple stock. In fact, it's the largest position in his portfolio.
One of the things that makes Apple so unique is the company keeps a close hold on its product line. It's rare that any of Apple's internal initiatives leak to the public. Rather, the company has a reputation of publicly showcasing new products or services during high-profile conferences -- surprising investors when they least expect it.
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Over the last 18 months or so, the technology world has become completely enamored by artificial intelligence (AI). While many big tech companies made headline-grabbing investments and partnerships, Apple remained quiet.
Although this was apropos for the iPhone maker, prolonged radio silence out of Cupertino started to get stale. But earlier this month, Apple finally revealed how it's going to play a role in the AI realm.
Let's explore Apple's latest announcement, and determine if now is a good time to scoop up shares.
Apple finally answered the call...
During its Worldwide Developers Conference (WWDC) earlier this month, Apple executives took the stage to address investors and explain how the company is going to be an AI player.
With its new product, Apple Intelligence, the company plans to integrate AI functionality across its line of hardware devices and several native applications. AI features on Apple's devices are being designed to make them more productive and allow users to be more creative in using AI to create and manipulate photos.
Apple's voice-based smart assistant, Siri, is also expected to get an overhaul thanks to a major partnership with OpenAI.
Image source: Getty Images.
...but is it enough?
I'm encouraged that Apple finally stopped playing coy and revealed its AI ambitions. However, after learning about the company's planned new features and services, I'm left a bit uninspired. I think that many of Apple's AI-powered tools already exist in other competing products offered by Alphabet and Microsoft.
Considering Alphabet and Microsoft have been investing aggressively into AI for the better part of a year, I can't help but think each has a leg up on Apple (at least for the time being).
On top of that, Apple Intelligence isn't expected to be released for quite some time. According to the company's website, a beta version of Apple Intelligence will release in the U.S. sometime in the fall. Should the launch prove successful, a more widespread release could be slotted for sometime next year.
Investors could argue that Apple's choice to take its time with the release is a prudent approach. After all, let's not forget that Alphabet has been at the center of quite a few hiccups when it comes to AI.
Is Apple stock a buy on its AI ambitions?
Apple's WWDC was held from June 10 to June 14.
Following the first day of the conference, Apple shares rose higher by about 7%. However, since its conclusion on June 14, shares of Apple are actually down about 2% as of market close on June 21.
I think this price action paints a pretty clear picture. Investors initially met the news of Apple Intelligence with cheers, but over the last couple of weeks this sentiment seems to have already fallen out of style.
With so many companies competing in the AI landscape, it's fair that investors are asking, "What have you done for me lately?" Candidly, Apple doesn't have a great answer to that.
Per the company's latest earnings, growth in China remains challenged all while sales across most major businesses continue to decline.
I'm skeptical that Apple Intelligence will be enough to right the ship, at least right now. Considering the company doesn't stand to benefit from AI tailwinds for several more months, I think it's best to sit on the sidelines for now.
There is a lot of pressure on Apple to deliver right now. Should the company execute a successful launch of Apple Intelligence, the next challenge will be to gain ground on its big tech competition. In turn, these dynamics will hopefully ignite some new growth for Apple. If Apple manages to achieve all of this, the stock could witness a newfound run and investors could indeed make some generational returns.
Until then, however, I'll be keeping a keen eye on Apple and its progress in the AI race.
